Arizona Republic

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The article reports that ML Manager LLC, acting on behalf ofinvestors in the project at 110 E. 7th St. placed the unpaidprincipal of the developer, Temple Land Co. LLC, at $135 million.Part of the difficulty with the project involved the recession. Theother problem was that the project had been originally financed byMortgages Ltd., which itself declared Chapter 11 in 2008, weeksafter the suicide death of its CEO, Scott Coles.

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Ken Losch, who headed up Tempe Land Co. tried everything hecould to keep Centerpoint going, even going so far as to file for voluntaryChapter 11 protection in late 2008. But Losch had littleluck with the frozen credit markets. As a result, Centerpoint isonly half complete, with its 22-story tower close to completion andits 30-story tower about half done.

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Jack Hannum and Bret Zinn, vice presidents with Transwestern'sPhoenix office, say Centerpoint's pending auction unfortunatelyisn't too surprising, given the difficulty of obtaining any kind ofconstruction financing during the past year and a half. The brokerstell GlobeSt.com that more such high-end condo projects are likelyto meet the same fate in the coming year.

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"They probably won't be this size, but they'll be projects thatare partially completed, then stopped," Zinn adds. "Then groupswill come in, buy and finish the product, and rent the units untilthe sales market comes back."

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If there is any good news in this scenario, it's thatCenterpoint likely won't have a lack of buyers. Hannum says asignificant number of investors tracked the Centerpoint saga whileit unfolded and are ready to come in and buy. "There are asignificant number of private investors who are interested I this,"he comments. "We're also seeing some institutions becominginterested in this."

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